Union Budget & Fiscal Deficit — Set 20

Correct Answer: A. A. Accuracy of the government's budgetary estimates compared to actual outcomes

Fiscal Marksmanship measures the accuracy of the government's Budget Estimates (BE) for revenue and expenditure when compared to the actual final figures (actuals). High fiscal marksmanship means the government's pre-year estimates closely match end-year outcomes. Poor marksmanship (large deviations) reduces the credibility of fiscal forecasts. Revenue shortfalls or expenditure overruns relative to BE indicate poor fiscal marksmanship.

Correct Answer: B. B. Public Account (pension contributions are liabilities held in trust)

The National Pension System (NPS) contributions from government employees and the government's matching contributions are credited to the NPS Trust and flow through the Public Account of India, not the Consolidated Fund, because the government holds them in trust for eventual payment to employees at retirement. Only the final pension payout upon retirement becomes a budget expenditure item. NPS was introduced in 2004 for new central government recruits.

Correct Answer: C. C. President gives assent after both Houses approve

The Union Budget cycle is complete when both the Appropriation Bill (authorizing withdrawals from the Consolidated Fund) and the Finance Bill (containing tax proposals) are passed by Parliament (Lok Sabha first, then Rajya Sabha for non-money bill aspects) and receive the President's assent. The Finance Bill must become the Finance Act by March 31. If not passed in time, the government must seek a Vote on Account to continue spending.

Correct Answer: B. B. Government should only borrow to invest (capital expenditure), not to fund current (revenue) expenditure

The Golden Rule of Public Finance, followed in many countries, states that the government should only borrow to invest (fund capital expenditure that creates productive assets) and not to fund current revenue expenditure (salaries, subsidies, interest). This ensures that borrowed money creates future returns to repay debt. The UK explicitly followed this rule in the 1990s-2000s. In India, the concept of Effective Revenue Deficit reflects a similar principle.

Correct Answer: B. B. Article 148

The Comptroller and Auditor General (CAG) of India is established under Article 148 of the Constitution. CAG audits all government accounts — Union, States, and government-funded bodies. CAG reports are submitted to the President/Governors who lay them before Parliament/Legislature. CAG acts as the guardian of public purse, ensuring government spending is in accordance with Parliament's appropriation. CAG is an independent constitutional authority.

Correct Answer: C. C. Article 114

Article 114 of the Constitution governs Appropriation Bills. It provides that no money shall be withdrawn from the Consolidated Fund of India except under appropriation made by law. The Appropriation Bill is therefore the legal instrument through which Parliament authorizes the executive to spend money from the Consolidated Fund for approved purposes. Without the Appropriation Act, the government cannot legally spend any money from the Consolidated Fund.

Correct Answer: B. B. Detailed statement of all receipts — tax, non-tax, capital receipts, and estimates of borrowings

The Receipts Budget is a detailed document presented as part of the Union Budget that contains the complete picture of all government receipts — both Revenue Receipts (tax revenue including direct and indirect taxes, non-tax revenue including interest receipts, dividends, fees) and Capital Receipts (market borrowings, external borrowings, small savings, disinvestment proceeds, recovery of loans). It is essential for understanding the government's total resource envelope for the year.

Correct Answer: B. B. Ministry-wise and scheme-wise details of revenue and capital expenditure of all departments

The Expenditure Budget (presented in two volumes) contains the detailed breakdown of all Central Government expenditure — ministry-wise, department-wise, and scheme-wise — for Revenue Expenditure (salaries, subsidies, interest, grants) and Capital Expenditure (asset creation, loans to states, defence capital). Vol. 1 covers revenue and capital expenditure by ministry; Vol. 2 provides scheme-level details of centrally-sponsored and central sector schemes.

Correct Answer: B. B. A concise summary of key budgetary aggregates — receipts, expenditure, deficits — in a readable format

Budget at a Glance (BAG) is a concise summary document released with the Union Budget that presents key budgetary aggregates — total receipts, total expenditure, fiscal deficit, revenue deficit, primary deficit, tax-GDP ratio, expenditure as % of GDP — in a user-friendly format with charts and tables. It is designed to make the Union Budget accessible to citizens, media, and policymakers without requiring reading of voluminous technical budget documents.

Correct Answer: B. B. Transfer subsidies directly to beneficiary bank accounts, eliminating middlemen and leakages

Direct Benefit Transfer (DBT), launched in 2013, transfers subsidy amounts (food, fertilizer, LPG, scholarships, MGNREGS wages, PM-Kisan) directly to the Aadhaar-linked bank accounts of beneficiaries, bypassing intermediaries and eliminating leakages. DBT has been credited with significant savings in the subsidy bill by plugging ghost beneficiaries and duplicate accounts. It improves targeting, reduces administrative costs, and empowers beneficiaries with direct cash access to welfare.